Fifteen percent of marketers to cut Q4 spending

Nearly 15% of marketers cut expenditures during the third quarter of 2011 and the same number plan to cut expenditures during Q4, according to the Direct Marketing Association's (DMA) Nov. 17 "Quarterly Business Review."

“These cuts reflect a lot about the economy,” said Yoram Wurmser, director of marketing and media insights at the DMA. “You have a two-tier economy where some segments are doing well and some are lagging.”

Wurmser said luxury goods and automobile marketers are performing and not seeing dramatic cuts whereas low- and medium-cost goods marketers are seeing cutbacks.

Despite lowered expenditures, 43.4% of marketers anticipate their spending will grow during the fourth quarter and 46% say they anticipate an increase in profitability.

“There's optimism out there. It's a good sign,” said Wurmser. “Marketer spending is growing, probably more slowly than a lot of people wanted at the beginning of 2011, but it's growing.”

Marketing acquisition efforts accounted for 59% of marketing budgets, according to the report. Almost 39% of marketers reported staff increases compared with 11.8% that reported decreases. Wurmser cited both figures as indications of industry-wide optimism.

Digital channels provided the highest return on investment (ROI) of all marketing channels, with search, social, and mobile tallying the most substantial reported ROI improvements since the second quarter.

“We saw marketers felt a higher need to show returns to C-level executives to quantify performance,” said Wurmser. “They're treating digital as a way to prove returns on specific investments. Returns are higher on digital than on traditional channels.”

The Quarterly Business Review for the third quarter of 2011 is based on 293 responses to an online survey conducted by the DMA's Research and Market Intelligence department in October.

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